What a whirlwind this political season has been ... and like it or not, there is a new tax structure; for most of us - believe it - the news is GOOD! Meaning, unless you are really "well to do," your homeowner tax benefits (primarily, the mortgage interest deduction) will not change. Whew!
Please read on …
These changes under the new tax plan affect homeowners:
· After this year, the interest paid on loans for vacation homes is no longer deductible.
· Property, state and local income taxes face a combined $10,000 deduction limit.
· The mortgage interest deduction drops to $750,000 of debt on your primary residence, down from $1 million. The $1 million cap RETURNS in 2026 J
· Property tax deductibility is limited to $10,000.
· Interest formerly paid (and deducted) on a 2nd/vacation home/RV, etc. – no longer deductible L
Interest paid on home-equity loans will no longer be deductible beginning in 2018. In other words, if you already have a home-equity loan or line of credit, your 2017 tax bill is the last year you can write off the interest paid on it, UNTIL 2026, when this provision will revert to current law, allowing a deduction for interest paid on up to $100,000 of home-equity debt.
For the overwhelming majority of us, this means we are, at least with regard to home-related tax benefits, unchanged in our status. Needless to say, the National Association of Realtors lobbied extensively (and continues to do so) on behalf of homeowners, to best support and protect their ability to afford home ownership and to enjoy the historic benefits of this essential piece of "The American Dream."
Happy New Year - may it be one of abundant good health, happiness, prosperity and peace for you and yours!